IslamicFinance.de

Nopporn Wong-Anan wrote in Arabianbusiness on 30 March that Saleh Malaikah, chairman of Islamic reinsurance operator BEST Re sees the takaful business growing by 17 % over the next 3 years. The growth prospects lying in the fact that insurance coverage is not widely used in the Middle East and shows therefore potential; Saudi Arabia has a market share of 20 % in takaful from the overall insurance market, and promises the highest growth rate. In Malaysia the takaful market share has reached 30 %.

Sukuk sales may rebound and reach a record this year, with the Gulf accounting for about two-thirds of the debt issued as higher yields attract investors according to NCB Capital. There is an estimated ‘pipeline’ of about USD 39.3 bn of so-called sukuk, Jarmo Kotilaine, chief economist at Saudi Arabia’s NCB Capital, said in a report. He estimates the pipeline from the Gulf Cooperation Council to be USD 24.6 bn.

The average extra yield on corporate and government sukuk above the London interbank offered rate is 12.26 % points, up from 5.76 % points a year ago, according to HSBC-Nasdaq Dubai indexes.

Albaraka Banking Group B.S.C (ABG) held its Ordinary and Extra Ordinary General Meetings today in Manama, the capital of Bahrain. A cash dividend of USD 27.9 mn was decided, which represents 4 % of the issued capital further bonus shares were approved in an amount of USD 46.5 at the rate for one share for every 15.

After deducting all the expenses, the total net income amounted to USD 201 mn in 2008, reflecting an increase of 37.1 % over the income in 2007 after excluding the effect of the extraordinary profit arising from the IPO of the Group's unit in Turkey from the profits of 2007.

The Saudi Capital Market Authority aims to promote the bond and Sukuk markets said its chairman Chairman Abdulrahman Al Tuwaijri according to Arabiya.

"The opportunities offered by Islamic finance in promoting global financial stability and financial inclusion are worth assessment by the leadership of the G-20 countries," said Jeddah-based Islamic Development Bank President Ahmed Mohamed Ali, reported Mushtak Parker in the Arab News.

The President told an Islamic Financial Architecture Colloquium hosted yesterday by Lord Mayor of the City of London Ian Luder at his official headquarters that it is time that the wider world should consider mainstreaming Islamic financial services. And the best way to do this is to accord the relevant Islamic finance stakeholders "observer status" within the framework of the G-20 and the expanded Financial Stability Forum of the International Monetary Fund (IMF).

The Gulf Opportunity Fund made it's second investment by taking a 70% stake in L'azurde, the world's fourth largest manufacturer of gold and jewellery and leading Middle East brand. The Fund is led by Investcorp and its consortium partners Eastgate Capital Group, is the private equity investment arm of NCB group of Saudi Arabia, and The National Investor.

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) is offering Export Credit Insurance which offers to protect the exporters from the risk of payment default by their buyers or importers on one hand, and offers them a number of indirect and direct financing products on the other hand. This dual solution approach mitigates the principal inherent risks in international trade, encouraging exporters in entering new markets and expanding customer base.

The concept was presented in Saudi-Arabia and the ICIEC is going to present the possibilities to other IDB member countries.

The Islamic Development Bank (IDB) said that it planned a USD 500 mn sukuk, to finance its 2009 financing program.

Al-Khabeer has been invited to participate as the only private company from the Arab World in the first-ever Business Forum on Islamic Finance, organized by the IE Business School in Spain in collaboration with the King Abdul Aziz University in Jeddah. A total of 50 senior-level corporate executives, ambassadors and journalists are expected to take part in the forum, which will include working papers, round-table discussions and Q&As.

The forum will be an excellent venue to identify new growth opportunities and discuss business prospects with potential partners from Spain and Latin America.

The International Zakat Organisation ('IZO'), an important new charitable body of the Organisation of The Islamic Conference ('OIC'), announced its selection of The BMB Group to lead a new global charitable initiative which promises to be the largest in the Islamic world.

The proposed Global Zakat & Charity Fund would be over USD 3 bn in size and will manage charitable funds to address needy causes in the world.

The Fund will invest in community development projects with an emphasis on sustainability. The four major areas to be targeted are: (1) income generation through the provision of private equity investments to small and medium enterprises, (2) development of social enterprise through the establishment of hospitals, educational institutions and housing developments (3) development of agricultural and other vital infrastructure and (4) the provision of relief and emergency funding.

Mat Hassan Esa is the CEO of International Zakat Organisation.
Dr Humayon Dar is the CEO of BMB Islamic.
BMB appoints David Gibson-Moore as Managing Partner.

The appointment of Muhammad Al-Jasser last month as the new governor of the Saudi Arabian Monetary Agency (SAMA). Foreign regulatory officials and bankers expect a much more proactive policy approach from the new governor. Others expect SAMA under Al-Jasser to open up to Islamic banking in particular and to show leadership in this field in the light of the growing globalization of the industry.

According to a survey published originally by the newspaper Al Qabas it results that Al Rajhi Bank with its market value of USD 22.4 bn was ahead of leading global banks, including: Morgan Stanley with USD 20.88 bn, Deutsche Bank with USD 13.83 bn, Barclays with USD 11.58 bn, Royal Bank of Scotland (RBS) with USD 10.93 bn and Citibank with USD 10.63 bn.

Islamic International Foundation for Economics & Finance in Saudi-Arabia aims to set up a committee of senior Islamic scholars in the kingdom by 2010 to help standardise Islamic banking edicts in Saudi-Arabia. The foundation is in the early talks with Sharia scholars and hoped to “institutionalise” Islamic rulings within a year, according to Mr Al-Zamil.

Yousef Abdullah al-Zamil is the foundation`s assistant secretary general.

Soren Billing reported on 10 February in Arabianbusiness that credit default swaps for Mideast lenders have risen substantially led by Bahrain, spreads have widened by 174.2 basis points (bps) in the last three months, followed by Saudi Arabia (114.8 bps), Abu Dhabi (96.7 bps) and Qatar at (70 bps), Corporates in the region have been hit even harder. The CDS spreads on Dubai based companies range between 600 bps and 1,100 bps, which is significantly higher than on Abu Dhabi based corporations, which range between 250 bps and 400 bps. The yield on Nakheel’s Sukuk that matures on Dec. 14 this year reached 41.9 % from 27.7 % a month ago.

Joint Press Release

Riyadh ? London, February 2 2009

Saudi Credit Bureau (SIMAH) and Standard & Poor's, the leading provider of financial market intelligence, independent ratings, indices, investment research and data across the Middle East?s credit risks launched today the National Data Pooling Project (NDPP) and signed a contract in Riyadh. SIMAH was represented by its General Manager Mr. Nabil Abdullah Al-Mubarak, Standard & Poor?s by Mr. David Pearce, Managing Director of McGraw-Hill International (UK) Ltd and Mr. Bernard O?Sullivan, Managing Director and Head of Standard & Poor?s Risk Solutions in Europe, Middle East & Africa.

In this context, Nabil Al-Mubarak stated that the project comes as the final step in the framework of specialized projects for measuring credit risks, which would enable all participating member banks to fulfill all requirements of Basel II capital adequacy issued in 2005, referring to the fact that the Kingdom has already been implementing Basel II Capital Standards since 2006, and welcoming at the same time the strategic relationship with Standard & Poor's.

The Scotsman reported on 29 January that SCOTTISH Widows Investment Partnership has launched a joint venture with Manar Financial Investment Company; Swip Saudi Asset Management. It will mainly focus on investment in the insurance sector, but will also manage shariah-compliant global emerging market equities.

Al-Khabeer Merchant Finance Corporation built a Joint-Venture with Al Mutajara installments company to establish ‘Dari for Home Loans,’ a new SAR 1 bn capitalised Saudi joint-stock company-under development stage, which will specialise in financing the construction and purchase of houses and residential properties in accordance with Islamic Sharia principles.

Dari Home Loans will become one of the first real estate financing companies in the Kingdom to specifically cater to the middle income sector. It will not include property developers among its pool of clients.

Dari Home Loans is currently appointing personnel and officials for managing its human resources and is negotiating with a global partner for the transfer of management experience to this sector in the Kingdom. Al-Khabeer is adopting its turnkey and integrated banking solutions to develop Dari, as Al-Khabeer directs the finance and advisory for the company. The new property funding firm’s founders are confident that it will be fully established in a short span of time given the strength of the Kingdom’s economy.

Mohammad Sheikh is Chief Operating Officer of Dari Home Loans.

Mushtak Parker reported in Arab News on 26 January about the launch of Falcom Sharia Index licensed by Tadawul (the Saudi stock exchange). The promoters claim that this index is the first of its kind on the Tadawul, and comprises some 112 companies which in turn comprise nearly 78 percent of the Tadawul All-Share Index (TASI).

Joanna Hartley reported on 24 January that the Saudi banking sector has posted poor results for the last quarter of 2008 impacted by the global economic environment according to Fitch rating, saying that 2009 will be challenging. The preliminary 2008 results released by the 10 main commercial banks in the kingdom confirmed that the last quarter of 2008 was the worst quarter of the year for all. Despite this the 10 banks remain among the highest rated by Fitch Ratings across the GCC region and generally have sound domestic franchises.

The expectation of tougher conditions for the banks and lower profitability in the coming months resulted in most banks' individual ratings being downgraded in December 2008. Their long-term issuer default ratings largely remain driven by the extremely high probability of support from the Saudi Arabian government (rated 'AA-').

According to CPIFinancial on 21 January, Al Salam Bank-Bahrain works with Tadhamon Islamic International Bank in agreement with Rawacheen Al Hijaz to issue Sukuk Manfa’a with a value exceeding SAR 857 mn on Burj Al Jewar, a commercial/residential tower overlooking the Holy Mosque in Mecca. Rawacheen Al Hijaz will act as the lead manager of the Sukuk Manfa’a.

The Sukuk program will give each Sukuk holder the right to benefit from the unit for a period of 19 Hijri years either to use it or sell, lease to others, grant or bequeath. The holders can also exchange their unit with another.